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2020 (12) TMI 1153 - AT - Income TaxBogus purchases - Estimation of income - search and seizure operation u/s. 132 - HELD THAT:- Just because the assessee had made payments through banking channels to the vendors and recorded the diamonds purchased in its stock book does not make the transactions to be genuine with conclusive evidence. Further there is no materials on record to justify that the stock is reconciled with respect to purchases, sales and closing stock item wise. There is every possibility for the assessee to make payment through banking channel and receive the same back by way of cash and obtain bogus purchase bills. It is also obvious that in the nature of business carried out by the assessee, 0.33% net profit declared by the assessee is too low and cannot be accepted. Further even if 24% of the turnover is estimated as the income of the assessee, the assessee should have earned net income of approx. ₹ 98,00,000/-. In the case of the assessee it has only declared net profit of ₹ 1,33,921/-. Considering these facts and circumstances of the case and the report of the Investigation Department of the Revenue, we are of the considered view that the addition made by the Ld. AO for ₹ 98,69,702/- is justifiable when there is a corroborative evidence from the records maintained by the vendors of the assessee that the purchases made by the assessee is bogus. - Decided against assessee.
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